Two General Services Administration employes testified yesterday that they were demoted after they objected that GSA was ignoring government directives to solicit competitive bids for governmet office space.
The employes, Bertrand G. Berube and Frances P. Clark, said the demotions came after they were told by an influential aide to GSA's deputy administrator, Robert T. Griffin, that obtaining competitive bids is not necessarily politically wise.
Thetestimony came on the second day of hearings by the Senate governmental affairs' subcommittee on federal spending which is looking into a range of apparent abuses by GSA. GSA is the agency that spends nearly $5 billion a year to provide government workers with office space and supplies, store government records, and maintain stockpiles of materials.
GSA is the target of federal investigations in Washington and Baltimore prosecutors here are finding that some GSA employes have certified that the agency has received services or goods it in fact never received. In return, the employes have received cash or other gifts form the companies doing business with GSA.
The two employes, whose job it was to monitor GSA compliance with the directive, testified yesterday that they had summarized their conversations with Griffin's aide, Peter M. Mollica, in a memorandum after Mollica talked with them in May 1977. The memo, which was entered into the record of the hearing said:
"He (Mollica) also felt that the competitive solicitation of alternatives would be politically inexpedient. For example, that if Congress tells us we're going to build a building in Savannah, Ga., we will build a building in Savannah, Ga., whether or not it was the most economic alternative. That there were other realities and factors that had to be considered."
The memo continued: "He said we were very naive and asked if we had ever heard of pork barrel. He gave Atlanta as a case in point that we [WORD ILLEGIBLE]building a federal building when there were empty office buildings that could be leased or purchased."
The memo said Mollica told the employes to stop their efforts to get GSA to comply with the directive on competitive bidding and quoted him as saying he would deny he ever had made such a statement.
The directive, issued by the Office of Management and Budget, instructs agencies to document how they will complete major projects before they are undertaken and requires them to obtain competitive bids on alternative bids such as leasing or building so the most economical goods or services will be purchased by the government.
Mollica - who, like Berube and Clard, testified under oath during yesterday's hearings - said he "vigorously denies" that the memo accurately describe his views on the OMB directive.
"Quite the contrary," Mollica said, "some nine months had elapsed since issuance of A-109 (the number designation of the directive), and I was as my wit's end to get implementation of A-109."
Following the hearing, Mollica said of the comments attributed to him concerning political expediency. "I didn't say it in that context. I pointed out you had to operate within the constraints that are upon us. I said we want to obey the law: that if Congress directed construction of a building, we will build it."
Mollica said he subsequently recommended abolishing the office that Berube headed, assisted by Clark. The primary purpose of that office was to make sure GSA complied with the OMB directive. Mollica said both Griffin and GSA administrator Jay Solomon agreed with the recommendation. However, this action, he said during the hearing, did not mean he or GSA felt the agency should not comply with the OMB order.
Mollica denied statements made during the hearing by the General Accounting Office and OMB officials that GSA had done little or nothing to comply with the OMB orders in the two years since they were issued, GAO is the audit arm of Congress.
"You disagree with the previous witnesses (Berube and Clark), with the GAO, and with the OMB, Sen. Lawton Chiles (D-Fla.) said at one-point, raising his voice. "Are you getting competitive alternatives?"
Mollica replied that such competition often slows the process of building or renting buildings. He said that Griffin, the deputy administrator, is now in charge of ensuring that the OMB directive is followed. Griffin was not asked to testify.
GSA administrator Solomon in his testimony, said he would restore both Berube and Clark to their former job levels.
". . . When somebody has the courage to speak up about what they believe is wrong, inefficient costly, extravant, or unjust in an agency, when they go public or go to a congressional committee it has long been the custom in government to shunt these people aside . . . I am from the business community and am not interested in these type customs," said Solomon, a former shopping center developer appointed by President Carter a year ago to head GSA.
Solomon's statement was certain to heighten barely disguised tensions between himself and Griffin. Although Griffin is Solomon's deputy, he has widely been perceived within the agency - at least until recently - as the individual running GSA.
As a longtime friend of House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.), Griffin has his own base of power. Solomon's predecessor, Jack M. Eckerd, resigned because of President Carter's insistence that he appoint Griffin his deputy at O'Neill's request.
Recently, Solomon has been asserting more control, as illustrated by a recent directive ordering GSA's auditors and investigators to report to him rather that to Griffin.
"Mr. Chairman," Solomon said yesterday, addressing Chiles, "it is very clear to me that we have significant problems within GSA." He said he has repeatedly spotted abuses and been told by subordinates that they would be corrected.But, he said, "the same old fraudulent patterns were still continuing, and I am just not going to put up with this anymore."
Solomon said he would deal "harshly" with employes who are involved in corrupt practices and will take "action" against those who permit fraud or inefficiency.
Solomon also said he has ordered GSA to obtain competitive bids whenever it sells surplus material from its strategic surplus. His order followed a Washington Post story quoting auditor's findings that GSA was planning to sell 80 million pounds of surplus lithium hydroxide at less than half its market value, resulting in a potential loss to taxpayers of $45 million.